President-elect Donald Trump plans to remake financial regulation, promising to dismantle the 2010 Dodd-Frank law, which was the Obama administration's response to the financial crisis.
After the government's answer to the 2008 financial crisis, the "big banks got bigger while community financial institutions have disappeared at a rate of one per day, and taxpayers remain on the hook for bailing out financial firms deemed 'too big to fail,'" says a statement posted on Trump's official transition website.
"The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation."
USÂ bank stocks climbed for a second straight day on Thursday as investors bet a Trump presidency will lead to less regulation and sideline industry critics in Congress led by Senator Elizabeth Warren.
The 24-company KBW Bank Index advanced 3 percent at 3:16 p.m. in New York, led by Wells Fargo & Co., which rose 7.4 percent. Bank of America Corp. advanced 4.5 percent, while JPMorgan Chase & Co. climbed 4.4 percent.
Trump antagonist
The call to scrap Dodd-Frank isn't likely to go over well with Warren, the Wall Street scourge and Trump antagonist who said Thursday that she'd be willing to work with the incoming administration to enact economic and banking policies so long as he didn't loosen existing rules.
In remarks prepared for an AFL-CIO labor federation event in Washington, Warren cited issues they agree on, including the need to curtail Wall Street influence in politics, reinstate Glass-Steagall Act limits on banking activities and reform trade deals.
"When President-elect Trump wants to take on these issues, when his goal is to increase the economic security of middle-class families, then count me in," the Massachusetts Democrat said on Thursday. "I will put aside our differences and I will work with him to accomplish that goal."
In addition to repealing Dodd-Frank, Trump's transition website outlines several policies that will be familiar to those who followed his campaign, including calls for a moratorium on new rules so existing measures can be reviewed.
Lower taxes
It also broadly addressed a tax-code overhaul, saying Trump's plan "can be summarised as lower, simpler, fairer, and pro-growth".
The new administration's plans for financial regulation could pull from a proposal released earlier this year by Representative Jeb Hensarling, the Texas Republican who leads the House Financial Services Committee.
His bill -- dubbed the Choice Act -- calls for ripping up core parts of Dodd-Frank, including a provision that empowers the government to dismantle failed banks.
He also wants to do away with Volcker Rule restrictions on banks' trading and investments, and to weaken the reach of the Consumer Financial Protection Bureau.
Warren's pledge offers a first glimpse of a strategy she may use next year when Republicans control the White House and both chambers in Congress.
"Americans want to hold the big banks accountable," Warren said.
"If Trump and the Republican Party try to turn loose the big banks and financial institutions so they can once again gamble with our economy and bring it all crashing down, then we will fight them every step of the way."
Bloomberg